Alibaba Group decides to merge food delivery units

Alibaba Group Holding is believed to be planning to merge its food delivery units

The company’s move comes as it tries to raise funds for the combined group

It also wants to place itself in a better position for its battle for market share in China

BEIJING, China - In a bid to be better prepared while engaging in a battle for bigger market share against Meituan-Dianping in China, Alibaba is now believed to be planning to merge its food delivery units.

Currently, Meituan-Dianping and Alibaba are running neck-to-neck in the on-demand market in China - providing everything from food delivery to restaurant reviews.

Now, reports have revealed that Alibaba Group Holding is seeking to battle its regional rival to get a bigger share of China's multibillion-dollar on-demand services industry.

As part of its plans, the company is reportedly looking to merge its food delivery units and raise funds for the combined group - which could be valued at as much as $25 billion.

A report in Reuters stated that Alibaba's food delivery platform Ele.me will merge with its food and lifestyle services arm Koubei.

Hangzhou-based Alibaba acquired Ele.me in April for $9.5 billion, and with its merger plans - it is reportedly looking to raise between $3 billion and $5 billion for the combined entity.

Further, a report in Bloomberg has stated that Japanese conglomerate SoftBank Group Corps $92 billion Vision Fund will lead the investment in the merged Ele.me and Koubei operation.

Meanwhile, the China Internet Report,co-authored by thePost, Abacus Newsand 500 Startups revealed that Tencent Holdings-backed Meituan-Dianping, which is currently China's most-funded eCommerce start-up, has drawn over $8 billion in funding.